President Barack Obama recently signed the Education Jobs and Medicaid Assistance Act of 2010 (HR 1586) into law. As part of the legislation, the advance earned income credit, claimed by eligible employees by filing 2010 Form W-5, Earned Income Credit Advance Payment Certificate, is repealed for 2011 and thereafter.

Non-Refundable Portion Still Available by Adjusting Withholding

Eligible taxpayers will be able to claim the refundable portion of their credit on their individual income tax returns and can claim the non-refundable portion either on their individual income tax returns or by adjusting their federal income tax withholding on Form W-4, Employee’s Withholding Allowance Certificate or its Spanish equivalent, 2010 Formulario W-4(SP), Certificado de Exención de la Retención del Empleado.

Contact Vision Payroll if you have further questions on the advance earned income credit.